Meta (META) Stock: Why It Jumped After Hours on Q3 Earnings

Quick answer

Meta Platforms stock rose 4.5% in after-hours trading on Oct 21, 2026, to $729.00 at 5:01pm ET, after third-quarter results beat on revenue and the company set up a new way to pay for its AI build. Revenue rose 26% to $64.60 billion, ahead of the $63.37 billion analysts expected, Reuters reported, and fourth-quarter guidance of $73 billion to $76 billion has a midpoint above the $73.73 billion estimate. Meta also said it will create a publicly listed, non-voting Class C stock in January 2027, handed out as one new share for every existing share, which gives it a currency to raise capital without diluting Mark Zuckerberg's vote. A $9.89 billion legal charge halved the operating margin to 20%, and the stock had closed the regular session up just 0.5% at $697.52, hours after a New Mexico judge ordered Meta to pay a $25 billion privacy penalty. The after-hours gain grew during the earnings call, peaking at $748.80 at 4:40pm.

Our view: Bullish through January 19, 2027, when the Class C stock is set to take effect. The three strongest facts for the stock: revenue grew 26%, above the top of Meta's own $61 billion to $64 billion guide, with the average price per ad up 14% and impressions up 10%; the full-year expense outlook rose by about the size of the legal charge and no more; and free cash flow of negative $2.12 billion was far better than the negative $9.4 billion analysts expected, the Wall Street Journal reported. The three strongest against: free cash flow turned negative for the first time since Meta went public; the new share class exists so Meta can sell stock; and the $25 billion New Mexico penalty adds to an August settlement worth up to $18.59 billion, with more youth-related trials due in the coming months. The business evidence carries more weight into January, because the legal bills are large but payable from $82.45 billion of cash and the penalty faces an appeal, while the revenue trend compounds every quarter. We would move off Bullish if Meta announces a Class C sale program before the effective date, if a court orders changes to how Meta uses personal data for ads, or if the stock closes back below the $694.25 Oct 20 close, giving up the whole earnings gain. This is a view on direction over that window, not a recommendation to trade the stock.

Meta Platforms daily closing price from Sep 8 to Oct 21, 2026, with the Sep 24 peak close, the Oct 20 close and the Oct 21 after-hours jump marked

Key takeaways

Meta rose 4.5% after hours to $729.00 at 5:01pm ET on Oct 21, after third-quarter revenue of $64.60 billion beat the $63.37 billion analysts expected and fourth-quarter guidance of $73 billion to $76 billion came in above the $73.73 billion estimate.
A $9.89 billion charge for the August settlement with 52 state attorneys general cut operating income to $12.99 billion; without it, operating income would have been $22.88 billion, up 11% from a year earlier.
Free cash flow was negative $2.12 billion as capital spending reached $34.91 billion, but the Wall Street Journal reported analysts had expected negative $9.4 billion.
Meta will create a non-voting Class C stock, effective January 19, 2027, paid as a one-share dividend on every Class A and Class B share, which works like a two-for-one split and gives Meta a new way to raise money for AI.
Our view is Bullish through January 19, 2027: the ad business is growing faster, spending outside the legal charge did not rise, and the $25 billion New Mexico penalty is about 30% of Meta's cash and faces an appeal.

Table of contents

Oct 21, 2026: a quiet session, then a jump on results and the share class
The numbers
The Class C stock
The case for the stock
The risks
What comes next

Meta started premarket trading at about $695 at 4am, dipped to $687.78 shortly after 7am, and was $692.49 at 9:20am, below the Oct 20 close. It opened the regular session at $697.74 and climbed to a high of $713.22 at about 12:20pm, up 2.7%. News of the New Mexico penalty broke early in the afternoon; Barron's noted the stock was still up 1.8% after it. The day's low of about $690 came at about 3:15pm, and minutes later Reuters carried a Semafor report that Meta planned non-voting shares and more stock sales to fund AI. It closed at $697.52, up 0.5%, on 23.8 million shares.

The release came out at about 4pm. The stock traded at $730 by 4:03pm and $725.55 at 4:04pm, held near $725 until the call began at 4:30pm, then rose to $748.80 at 4:40pm. By 5:01pm it was $729.00.

What lifted it:

Revenue and the outlook beat. Revenue of $64.60 billion was 1.9% above estimates, and the fourth-quarter midpoint of $74.5 billion implies growth of about 24%.
Spending did not run further. The 2026 expense range moved to $175 billion to $179 billion from $165 billion to $169 billion, a rise of about the $9.89 billion charge. Capital spending guidance moved to $135 billion to $145 billion from $130 billion to $145 billion, which Reuters described as a tighter forecast; the top of the range did not move.
Cash burn was smaller than feared. Operating cash flow was $32.79 billion against $34.91 billion of capital spending.
A funding source that keeps control. The Class C plan answers how Meta pays for the build without more debt or a loss of founder control.

What held it back during the day:

The $25 billion penalty. The Wall Street Journal reported Judge Francis Mathew set the penalty weeks after a jury found about 44 million violations of New Mexico's unfair practices law, which allows up to $5,000 each. The state had asked for $35 billion to $40 billion; Meta had argued for $345 million to $3.5 billion. Meta's chief legal officer said the company will appeal.
A soft sector. Alphabet fell 1.6% and the Communication Services sector ETF 1.1%, while QQQ rose 1.1%.

Stock or fund	Oct 21 close	Day change	After hours, 4:55pm to 5:01pm
Meta Platforms (META)	$697.52	+0.5%	+4.5%
Alphabet (GOOGL)	$334.76	-1.6%	+0.2%
Amazon (AMZN)	$262.37	-0.1%	+0.1%
Microsoft (MSFT)	$532.95	+0.2%	-0.1%
Snap (SNAP)	$6.35	-0.5%	+1.7%
Pinterest (PINS)	$22.95	-0.1%	0.0%
Reddit (RDDT)	$153.28	-1.5%	0.0%
Communication Services ETF (XLC)	$108.97	-1.1%	+1.6%
Invesco QQQ (QQQ)	$725.20	+1.1%	+0.1%

Meta held up better than its ad peers in the session, and after hours it moved far more than any of them. The gain is about the report, not the sector.

At the regular close, RSI(14) stood at 47, the shares sat 5.5% above their 50-day average and 10.3% above their 200-day average, volume ran 1.2 times its 20-day average, and the stock was 10.6% below its 52-week high of $779.82. At $729.00 after hours it was 6.5% below that high.

The numbers

Bar chart of Meta revenue against analyst estimates: Q3 2026 estimate $63.37 billion, reported $64.60 billion; Q4 2026 estimate $73.73 billion, guidance midpoint $74.50 billion

Measure	Q3 2026	Q3 2025	Change
Revenue	$64.60B	$51.24B	+26%
Operating income	$12.99B	$20.54B	-37%
Operating income without the legal charge	$22.88B	$20.54B	+11%
Diluted EPS	$3.83	$1.05	+265%
Capital expenditures	$34.91B	$19.37B	+80%
Free cash flow	-$2.12B	$10.63B	n/a

Diluted earnings would have been $7.40 a share without the charge, Reuters reported. Family daily active people averaged 3.64 billion in September, up 3%. Headcount fell 15% to 66,775. Reality Labs lost $4.13 billion in the quarter, and Meta expects its full-year loss to fall to $18 billion to $19 billion, then to about $15 billion in 2027 as money moves to AI. Meta bought back no stock in the quarter, after $3.33 billion a year earlier. For why an outlook can matter more than the quarter itself, see our explainer on guidance changes.

The Class C stock

Meta's board declared a one-time dividend of one Class C share for each Class A and Class B share, paid after an amended charter takes effect on January 19, 2027. Meta expects the Class A price to reflect a two-for-one split after that. A special committee of independent directors recommended the change, holders approved it by written consent, and Meta signed a Founder Alignment Agreement with Zuckerberg that covers his sales of Class C shares and his service. Meta plans to list Class C on Nasdaq.

The dividend itself dilutes no one. The point is what comes after: Meta said the stock gives it "the ability to finance its growth," along with paying employees and funding deals. Every Class C share sold later raises the share count, which is how dilution reaches existing holders. Our page on dual-class share structures covers how markets tend to price voting and non-voting lines.

The case for the stock

The ad business keeps beating its own forecasts. Meta had guided the third quarter to $61 billion to $64 billion in July and came in above the top of that range, and revenue rose $3.8 billion from the second quarter's $60.80 billion. Meta still expects 2026 operating income, excluding the charge, to top 2025. The forward P/E is about 21 on the regular close, and the consensus price target is $803.62, about 15% above the regular close. By Oct 20 the stock had fallen 10.7% from its Sep 24 peak close, so the report met a stock that had already given back ground.

The risks

Legal costs keep coming. The New Mexico penalty is 30% of Meta's $82.45 billion of cash and about 1.4% of its $1.78 trillion market value. The Wall Street Journal reported New Mexico will also ask the court to order changes to Meta's platforms, and Meta flagged several youth-related trials in the coming months. Our guide on how to value a litigation outcome explains how to weigh a judgment that is under appeal.
Spending with no 2027 number. Meta said it will keep "investing aggressively" next year but gave no figure, and its release says its AI lab investments "will take longer to generate returns than those in our core business."
Share sales. Once Class C exists, Meta can sell stock to fund capital spending, a new source of supply for the shares.

What comes next

January 19, 2027. The Class C charter takes effect, and the stock dividend follows. Watch for any sale program filed alongside it.
The fourth-quarter report, date not yet set, with the first 2027 spending outlook. Our guide to preparing for an earnings report covers what tends to move a stock on the day.
New Mexico post-trial steps. An appeal, a bond and any order on platform changes.

For other names moving after results today, see today's biggest stock moves.

Frequently asked questions

Why did Meta stock go up after earnings?

Third-quarter revenue of $64.60 billion rose 26% and beat the $63.37 billion analysts expected, and fourth-quarter guidance of $73 billion to $76 billion was above the $73.73 billion estimate. Cash burn was also much smaller than feared. The stock rose as much as 7.4% after hours, to $748.80 at 4:40pm ET, during the earnings call.

Is Meta splitting its stock?

In effect, yes. Meta will pay a one-time dividend of one new non-voting Class C share for each Class A and Class B share once the new class takes effect on January 19, 2027. Meta said it expects the Class A price to reflect a two-for-one split after the dividend is paid, and the dividend does not change anyone's voting power.

Why is Meta creating non-voting Class C shares?

Meta said a special committee of independent directors concluded the new class gives it the ability to finance its growth, given the scale of investment needed for AI. The shares can also be used for employee pay and acquisitions. Because they carry no vote, Meta can issue them without reducing Mark Zuckerberg's control.

How much does Meta have to pay New Mexico?

A New Mexico judge ordered Meta on Oct 21 to pay a $25 billion civil penalty after a jury found it misled users about data privacy, in a case tied to Cambridge Analytica. The Wall Street Journal reported the jury found about 44 million violations of the state's unfair practices law. Meta's chief legal officer said the company plans to appeal.

How much will Meta spend on AI in 2026?

Meta expects 2026 capital expenditures, including finance lease principal payments, of $135 billion to $145 billion, up from $130 billion to $145 billion. It did not give a 2027 figure, but said it expects to keep investing aggressively in its core business and AI.

When does Meta report earnings next?

Meta has not announced the date of its fourth-quarter report. The nearer dated event is January 19, 2027, when the Class C stock is set to take effect and the one-share dividend follows.

Sources

Article details

By James Whitfield, Head of Equity Research, Dombey Capital

Published October 21, 2026 · 7 min read · Event-Driven Investing